CME Launching Bitcoin Futures After Green Light From Regulator

CME announced Friday its new bitcoin futures contract will be available for trading on Dec.18.

The CME announcement came as the Commodity Futures Trading Commission said it will allow the world’s largest futures exchange and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts. Cantor Exchange also self-certified a new contract for bitcoin binary options, the commission said.

Bitcoin traded more than 6 percent higher at $10,539 on Friday, recovering partly from a 20 percent drop to $9,021.85 from a record high of $11,377.33 hit Wednesday, according to CoinDesk.

“I think it is going to enable finally the approval of bitcoin ETFs, and other digital currency ETFs, which is game changing,” Barry Silbert, founder and CEO of Digital Currency Group, said on CNBC’s “Squawk Box.”

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CME’s announcement comes as other major exchanges rush to launch their own bitcoin derivatives products.

Shares of CME spiked 1.7 percent to an all-time high Friday morning. Cboe’s stock traded little changed after setting a record close Thursday.

The CFTC does not approve derivatives contracts or endorse their underlying assets.

“Commission staff held rigorous discussions with CME over the course of six weeks, CFE over the course of four months, and had numerous calls with Cantor,” a CFTC release said.

“Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past,” CFTC Chairman J. Christopher Giancarlo said in a statement. “As a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets.”

In a separate release Friday, Cboe said it has filed a product certification with the Commodity Futures Trading Commission to offer bitcoin futures trading. The certification is subject to regulatory review and a launch date “will be announced shortly,” according to a release.

A Cboe spokesperson initially told CNBC the bitcoin futures launch is expected “probably before the end of the year,” but later clarified, saying the exchange couldn’t be that specific. “We are operationally ready and we will be announcing a launch date shortly,” the spokesperson said in new statement.

Nasdaq plans to launch bitcoin futures as early as the second quarter of 2018, exchange officials told CNBC on Thursday. Nasdaq would base its price off of 50 bitcoin sources from around the world, while Cboe is currently using one and the CME is using four, a Nasdaq spokesperson said.